Greggs has won an initial case against its insurer over a £150m claim for covid business interruption.
A high court judge has accepted most of Greggs’ arguments in a claim the retailer has made against Zurich Insurance.
Zurich had contended that all of Greggs’ business interruption loss during the pandemic could be attributed to or were in connection with a ‘single occurrence’. It argued these should be grouped together as a single business interruption loss subject to a limit of liability of £2.5m.
The insurer said it had indemnified Greggs by paying the retailer £2.5m in January 2021.
Greggs disputed this, making a claim of more than £150m and stating the loss the business suffered “on any given day and in any given locality depended essentially on which was the situation at that time and place”.
The retailer closed all its shops from 25 March until late May 2020. A phased reopening started that month, but Greggs said further government restrictions and the effect of the virus in the UK led to more business interruption losses.
Greggs argued it had been subject to around 120 announcements and regulations over the course of the outbreak.
In his judgment, judge Mr Justice Butcher said he was unable to accept there was a ‘single occurrence’ constituted by a coordinated government covid response from March to December 2020.
“What happened over that period of time was a series of increasingly divergent responses to different conditions as they presented themselves,” he stated in yesterday’s (17 October) ruling.
Mr Butcher pointed out, for example, that the various announcements and regulations applicable in the four nations could not be regarded as ‘single occurrences’ even when they had similar effects.
“There were, instead, a number of different occurrences in each nation, by which new restrictions, which were of significance to Greggs’ business, were brought in at different times,” he stated.
Concluding his judgment, Mr Butcher said he hoped Greggs and Zurich would now be able to agree on the number of relevant occurrences.
“If they cannot, and it remains material, I will hear further argument by reference to each of the different announcements / regulations pleaded by Greggs.”
Following the judgment, Zurich Insurance told British Baker: “We can confirm we are reviewing the court judgment and have no further comment at this time.”